28 May, La Repubblica
Has the Naples property market recovered? Are people buying houses? Who is buying and why?
The figures concerning transactions in Naples talk about a weak recovery. Prices have slightly increased on average in the last few months (less than 2%) after a recession phase lasted ten years.
House is seen again as a safe-haven asset due to the uncertainty of politics. The more difficult starting the new government is, the more money savers are discouraged from investing in securities and bank deposits, and they instead look at real estate, seen as a safer investment.
Moreover, other factors influence the property market. For example, Naples benefited from tourism, the growth of the hospitality and catering sectors, with positive consequences on minor constructions and renovation works. The families with spacious houses and more rooms than needed made some remodelling to rent short-term those spaces to tourists.
The future of tourism in Naples and its impact on the property market is at the centre of the debate at the moment. Some observers believe that in the next few years the number of tourists visiting the city will double, at the condition that the travel and accommodation costs will remain the same, indeed very convenient if compared with other cities such a Venice, Florence and Rome. Other analysts worry that an excessive number of tourists might compromise the social composition of the city centre, confining the low-income population in the suburbs since they’ll be no longer able to afford the increased rents and the higher living costs. In this case, there is some concern about the gentrification of the old town of Naples. Gentrification, from the verb gentrify, means making exclusive a particular neighbourhood, promoting the presence of the wealthy middle-class with the consequent reduction of the smaller middle class, forced to move elsewhere.
Finally, tourism has an ambivalent effect on the city administration, the public institutions, and indirectly on the property market.
With the increased presence of tourists, there is a growth of the popular consent to the politicians that praising the benefits of tourism (especially in terms of new jobs and higher purchasing power of the locals), even though such benefits are not due to the work of the institutions. But with the arrival of tourists, the flaws of the local infrastructure become more evident: public transportation is not adequate, poor public hygiene, greater concerns about safety in the overcrowded city centre. Therefore, if the quality of living in the city gets worse, property prices will go down.
The composition of the local population is another factor influencing the property market. When old people prevail, there is the tendency to separate the ownership from the use of the property. Owners sell the bare ownership reserving the right to live in the property till they die. The separation of the ownership from the use has its advantages: it decreases the price of properties, the seller will have some savings to allow him/her to live comfortably, it avoids the successors to turn to the market when the property is available after the death of the occupant.
Selling the bare ownership encourages the presence of young people among propriety owners. Hence, it helps to have a more balanced composition of the population regarding age. In fact, it’s very common for middle-class to buy the bare ownership of a property to pass it to the sons, especially in case of daughters. There are also cases of young people that temporarily moved to northern Italy or abroad for work and plan to go back to Naples living in the houses whose bare ownership was bought by the parents. These are all examples contradicting the belief that Naples is a city in an irreversible state of decline, without a future. These youths don’t believe that the only hope is rebelling against a power which oppresses the city.
Source: La Repubblica
Translator: Cristina Ambrosi